A rapid downturn is exposing Iceland’s structural weaknesses

Over the years Iceland caught up rapidly with the richest OECD economies. Favourable external conditions and good macroeconomic policies helped foster strong growth, low unemployment, low inflation, and sustainable public finances. Iceland is also one of the most inclusive economies in the OECD thanks to high employment, little wage inequality, and a well-targeted social benefit system, suggesting that a performing economy and an egalitarian society can go together. More...